Previous Year Question
Which of the following statements regarding “Green Climate Fund” is/are correct?
It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank.
Select the correct answer using the code given below:
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Correct Answer: A
Detailed Solution
GCF stands for the Green Climate Fund.
Statement 1 is correct: The GCF provides financial assistance to developing countries for programmes and projects relating to climate-change mitigation and adaptation.
Mitigation includes activities that reduce greenhouse gas emissions or increase carbon sinks.
Renewable energy, energy efficiency, low-carbon transport and forest conservation are examples of mitigation projects.
Adaptation aims to reduce the vulnerability of countries, communities and ecosystems to the effects of climate change.
Water conservation, climate-resilient agriculture, coastal protection, disaster early warning and resilient health infrastructure are examples of adaptation activities.
The GCF particularly focuses on the needs of highly vulnerable countries such as Least Developed Countries, Small Island Developing States and African States.
It can provide assistance through different financial instruments, including grants, concessional loans, equity and guarantees.
The GCF operates on the principle of country ownership, under which projects should be aligned with the climate priorities and development plans of the concerned country.
Its direct-access arrangement allows certain accredited national and regional institutions to obtain funding without an international intermediary institution.
Statement 2 is incorrect: The GCF was not established under the joint aegis of UNEP, OECD, the Asian Development Bank and the World Bank.
It was established at UNFCCC COP16, held in Cancun in 2010.
It is an operating entity of the financial mechanism of the UNFCCC and also serves the Paris Agreement.
The headquarters of the GCF is located in Songdo, Incheon, South Korea.
It is governed by a Board having equal representation from developed and developing countries.
The World Bank served as an interim trustee for the GCF, but this does not make the GCF an institution established under the World Bank’s aegis.
UNEP, OECD and the Asian Development Bank undertake various climate-related activities, but they are not the founders or joint administrators of the GCF.